Holding Cheaper

YM pushed below its overnight base in the second half of Sydney dealing, with XM lacking any real conviction after a brief and shallow look below its own overnight low. That leaves the former -16.0 and the latter -16.5 ahead of the bell (both off lows), with wider cash ACGBs running 13-16bp cheaper across the curve, with 10s providing the weakest point.

• Aussie bonds looked through a modest richening in U.S. Tsys (which faded) and narrower than expected Australian trade surplus in August. The latter saw a more meaningful upside surprise in imports than in exports (the headline trade surplus remains elevated in a historical sense).
• Bills run 9-20bp cheaper through the reds, with dated OIS pricing of the RBA’s terminal rate moving back up to 3.80%.
• Looking ahead, A$700mn of ACGB Nov-25 supply is due on Friday, along with the release of the AOFM’s weekly issuance slate.